##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended: June 30, 2010
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number: 001-31533
 DUSA PHARMACEUTICALS, INC.
  New Jersey
    
    22-3103129(State of Other Jurisdiction of
    
    (I.R.S. Employer Identification No.)Incorporation or Organization)25 Upton Drive, Wilmington, MA
    
    01887(Address of Principal Executive Offices)
    
    (Zip Code)
 
 
 þ o
 o o
  Large accelerated filer o   
    Accelerated filer o
    Non-accelerated filer þ
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



DUSA PHARMACEUTICALS, INC.
TABLE OF CONTENTS TO FORM 10-Q
 PageNumberPART I. FINANCIAL INFORMATIONItem 1. Financial Statements- Condensed Consolidated Balance Sheets at June 30, 2010 and December 31, 2009 (Unaudited)
    
    
    3- Condensed Consolidated Statements of Operations for the three and six-month periods ended June 30, 2010 and 2009 (Unaudited)
    
    
    4- Condensed Consolidated Statements of Cash Flows for the six-month periods ended June 30, 2010 and 2009 (Unaudited)
    
    
    5- Notes to the Condensed Consolidated Financial Statements (Unaudited)
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    23Item 4. Controls and Procedures
    
    
    23PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    25Item 1A. Risk Factors
    
    
    25Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    33Item 3. Defaults Upon Senior Securities
    
    
    33Item 4. Removed and Reserved
    
    
    33Item 5. Other Information
    
    
    33Item 6. Exhibits
    
    
    34SIGNATURES
    
    
    34Exhibit Index
    
    
    35EX-31.A: SECTION 302 CERTIFICATION OF THE C.E.O.EX-31.B: SECTION 302 CERTIFICATION OF THE C.F.O.EX-32.A: SECTION 906 CERTIFICATION OF THE C.E.OEX-32.B: SECTION 906 CERTIFICATION OF THE C.F.O.EX-99.1: PRESS RELEASEEX-31.AEX-31.BEX-32.AEX-32.BEX-99.1
  2




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PART I.
 
 ITEM 1. FINANCIAL STATEMENTS
 DUSA PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 June 30,
    
    December 31,2010
    
    2009ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    5,669,331
    
    
    $
    7,613,378Marketable securities
    
    
    11,865,113
    
    
    
    9,055,959Accounts receivable, net of allowance for
doubtful accounts of $67,000 and $86,000 in
2010 and 2009, respectively
    
    
    1,926,810
    
    
    
    2,629,189Inventory
    
    
    2,264,421
    
    
    
    2,170,275Prepaid and other current assets
    
    
    1,160,700
    
    
    
    1,561,467TOTAL CURRENT ASSETS
    
    
    22,886,375
    
    
    
    23,030,268Restricted cash
    
    
    174,473
    
    
    
    174,255Property, plant and equipment, net
    
    
    1,548,934
    
    
    
    1,660,755Deferred charges and other assets
    
    
    68,099
    
    
    
    68,099TOTAL ASSETS
    
    $
    24,677,881
    
    
    $
    24,933,377LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESAccounts payable
    
    $
    963,140
    
    
    $
    630,144Accrued compensation
    
    
    754,595
    
    
    
    1,260,609Other accrued expenses
    
    
    2,261,243
    
    
    
    2,456,612Deferred revenues
    
    
    644,243
    
    
    
    902,597TOTAL CURRENT LIABILITIES
    
    
    4,623,221
    
    
    
    5,249,962Deferred revenues
    
    
    2,794,179
    
    
    
    2,906,020Warrant liability
    
    
    1,169,195
    
    
    
    812,905Other liabilities
    
    
    94,349
    
    
    
    123,016TOTAL LIABILITIES
    
    
    8,680,944
    
    
    
    9,091,903COMMITMENTS AND CONTINGENCIES (NOTE 13)SHAREHOLDERS EQUITYCapital StockAuthorized: 100,000,000 shares; 40,000,000
shares designated as common stock, no par,
and 60,000,000 shares issuable in Series or
classes; and 40,000 junior Series A
preferred shares. Issued and outstanding: 24,207,965 and 24,108,908 shares of common
stock, no par, at June 30, 2010 and
December 31, 2009, respectively
    
    
    151,785,950
    
    
    
    151,683,399Additional paid-in capital
    
    
    8,656,438
    
    
    
    8,291,805Accumulated deficit
    
    
    (144,595,506
    )
    
    
    (144,359,217
    )Accumulated other comprehensive income
    
    
    150,055
    
    
    
    225,487TOTAL SHAREHOLDERS EQUITY
    
    
    15,996,937
    
    
    
    15,841,474TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    24,677,881
    
    
    $
    24,933,377
  3




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DUSA PHARMACEUTICALS, INC.


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
 Three months ended
    
    Six months endedJune 30,
    
    June 30,2010
    
    2009
    
    2010
    
    2009Product revenues
    
    $
    8,700,937
    
    
    $
    6,965,541
    
    
    $
    17,414,817
    
    
    $
    14,103,810Cost of product revenues
    
    
    1,782,108
    
    
    
    1,440,864
    
    
    
    3,600,293
    
    
    
    3,379,090GROSS MARGIN
    
    
    6,918,829
    
    
    
    5,524,677
    
    
    
    13,814,524
    
    
    
    10,724,720Operating costs:Research and development
    
    
    1,250,411
    
    
    
    1,076,709
    
    
    
    2,360,078
    
    
    
    2,261,804Marketing and sales
    
    
    3,137,985
    
    
    
    3,037,311
    
    
    
    6,751,784
    
    
    
    6,447,415General and administrative
    
    
    2,247,066
    
    
    
    2,340,947
    
    
    
    4,710,230
    
    
    
    4,482,397Settlements, net
    
    
    
    
    
    
    75,000
    
    
    
    
    
    
    
    75,000TOTAL OPERATING COSTS
    
    
    6,635,462
    
    
    
    6,529,967
    
    
    
    13,822,092
    
    
    
    13,266,616INCOME (LOSS) FROM OPERATIONS
    
    
    283,367
    
    
    
    (1,005,290
    )
    
    
    (7,568
    )
    
    
    (2,541,896
    )(Loss) gain on change in fair
value of warrants
    
    
    (157,015
    )
    
    
    73,183
    
    
    
    (356,290
    )
    
    
    (61,730
    )Other income
    
    
    61,842
    
    
    
    79,398
    
    
    
    127,569
    
    
    
    143,986NET INCOME (LOSS)
    
    $
    188,194
    
    
    $
    (852,709
    )
    
    $
    (236,289
    )
    
    $
    (2,459,640
    )BASIC AND DILUTED NET INCOME
(LOSS) PER COMMON SHARE
    
    $
    0.01
    
    
    $
    (0.04
    )
    
    $
    (0.01
    )
    
    $
    (0.10
    )WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING, BASIC
    
    
    24,187,569
    
    
    
    24,100,874
    
    
    
    24,155,194
    
    
    
    24,095,149WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING, DILUTED
    
    
    24,566,476
    
    
    
    24,100,874
    
    
    
    24,155,194
    
    
    
    24,095,149
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DUSA PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 Six months endedJune 30,2010
    
    2009CASH FLOWS FROM OPERATING ACTIVITIESNet loss
    
    $
    (236,289
    )
    
    $
    (2,459,640
    )Adjustments to reconcile net loss to net cash provided by (used in) operating activities:Accretion of premiums and discounts on marketable securities
    
    
    5,414
    
    
    
    22,708Realized loss on sales of marketable securities
    
    
    
    
    
    
    36,822Share-based compensation
    
    
    488,031
    
    
    
    424,593Depreciation and amortization
    
    
    198,383
    
    
    
    236,371Loss on change in fair value of warrants
    
    
    356,290
    
    
    
    61,730Deferred revenues recognized
    
    
    (370,195
    )
    
    
    (417,283
    )Changes in other assets and liabilities impacting cash flows from operations:Accounts receivable
    
    
    702,379
    
    
    
    817,654Inventory
    
    
    (94,146
    )
    
    
    262,362Prepaid and other current assets
    
    
    400,767
    
    
    
    480,616Accounts payable, accrued compensation and other accrued expenses
    
    
    (368,387
    )
    
    
    (1,659,618
    )Other liabilities
    
    
    (28,667
    )
    
    
    (100,604
    )NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
    
    
    1,053,580
    
    
    
    (2,294,289
    )CASH FLOWS FROM INVESTING ACTIVITIESPurchases of marketable securities
    
    
    (3,000,000
    )
    
    
    (9,038,979
    )Proceeds from maturities and sales of marketable securities
    
    
    110,000
    
    
    
    11,423,159Restricted cash
    
    
    (218
    )
    
    
    (236
    )Purchases of property, plant and equipment
    
    
    (86,562
    )
    
    
    (71,878
    )NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES
    
    
    (2,976,780
    )
    
    
    2,312,066CASH FLOWS FROM FINANCING ACTIVITIESStock option exercises
    
    
    21,643
    
    
    
    Settlements of restricted stock for tax withholding obligations
    
    
    (42,490
    )
    
    
    (4,413
    )NET CASH USED IN FINANCING ACTIVITIES
    
    
    (20,847
    )
    
    
    (4,413
    )NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    (1,944,047
    )
    
    
    13,364CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    
    
    7,613,378
    
    
    
    3,880,673CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    5,669,331
    
    
    $
    3,894,037
  5




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DUSA PHARMACEUTICALS, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 1) BASIS OF PRESENTATION
   2) NEW ACCOUNTING PRONOUNCEMENTS
 Accounting Standards To Be Adopted
 Multiple-Deliverable Revenue Arrangements
 , Revenue Recognition  Milestone Method (Topic 605):
Milestone Method of Revenue Recognition
 3) FINANCIAL INSTRUMENTS
 Fair Value Measurements
    6




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Fair Value Measurements at June 30, 2010Carrying Value
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)AssetsCash and cash equivalents
    
    $
    5,669,000
    
    
    $
    5,669,000
    
    
    $
    
    
    
    $
    United States government-backed securities
    
    
    11,079,000
    
    
    
    
    
    
    
    11,079,000
    
    
    
    Corporate securities
    
    
    786,000
    
    
    
    
    
    
    
    786,000
    
    
    
    Total assets at fair value
    
    
    17,534,000
    
    
    
    5,669,000
    
    
    
    11,865,000
    
    
    
    LiabilitiesWarrant liability
    
    
    1,169,000
    
    
    
    
    
    
    
    
    
    
    
    1,169,000Total liabilities at fair value
    
    $
    1,169,000
    
    
    $
    
    
    
    $
    
    
    
    $
    1,169,000
 Fair Value Measurements at December 31, 2009Carrying Value
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)AssetsCash and cash equivalents
    
    $
    7,613,000
    
    
    $
    7,613,000
    
    
    $
    
    
    
    $
    United States government-backed securities
    
    
    8,150,000
    
    
    
    
    
    
    
    8,150,000
    
    
    
    Corporate securities
    
    
    906,000
    
    
    
    
    
    
    
    906,000
    
    
    
    Total assets at fair value
    
    
    16,669,000
    
    
    
    7,613,000
    
    
    
    9,056,000
    
    
    
    LiabilitiesWarrant liability
    
    
    813,000
    
    
    
    
    
    
    
    
    
    
    
    813,000Total liabilities at fair value
    
    $
    813,000
    
    
    $
    
    
    
    $
    
    
    
    $
    813,000
   7




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Fair Value Measurements Using Significant Unobservable Inputs (Level 3)Six-Month Period Ended June 30, 2010Change inUnrealizedGainsRelated toPurchases,
    
    
    
    
    
    
    
    
    
    FinancialFair Value
    
    
    
    
    
    Sales,
    
    Transfers
    
    
    
    
    
    Instrumentsat
    
    Total
    
    Issuances,
    
    In and/or
    
    Fair Value at
    
    Held atJanuary 1,
    
    Unrealized
    
    Settlements,
    
    Out of
    
    June 30,
    
    June 302010
    
    Loss
    
    net
    
    Level 3
    
    2010
    
    2010Warrant Liability
    
    $
    813,000
    
    
    $
    356,000
    
    
    $
    
    
    
    $
    
    
    
    $
    1,169,000
    
    
    $
    (356,000
    )
 Fair Value Measurements Using Significant Unobservable Inputs (Level 3)Six-Month Period Ended June 30, 2009Change inUnrealizedGainsRelated toPurchases,
    
    
    
    
    
    
    
    
    
    FinancialFair Value
    
    
    
    
    
    Sales,
    
    Transfers
    
    Fair Value
    
    Instrumentsat
    
    Total
    
    Issuances,
    
    In and/or
    
    at
    
    Held atJanuary 1,
    
    Unrealized
    
    Settlements,
    
    Out of
    
    June 30,
    
    June 30,2009
    
    Loss
    
    net
    
    Level 3
    
    2009
    
    2009Warrant Liability
    
    $
    436,000
    
    
    $
    62,000
    
    
    $
    
    
    
    $
    
    
    
    $
    498,000
    
    
    $
    (62,000
    )
 Marketable Securities
  June 30, 2010Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueUnited States government-backed securities
    
    $
    10,991,000
    
    
    $
    88,000
    
    
    $
    
    
    
    $
    11,079,000Corporate securities
    
    
    724,000
    
    
    
    62,000
    
    
    
    
    
    
    
    786,000Total marketable securities
    
    $
    11,715,000
    
    
    $
    150,000
    
    
    $
    
    
    
    $
    11,865,000
 December 31, 2009Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueUnited States government-backed securities
    
    $
    8,005,000
    
    
    $
    145,000
    
    
    $
    
    
    
    $
    8,150,000Corporate securities
    
    
    826,000
    
    
    
    80,000
    
    
    
    
    
    
    
    906,000Total marketable securities
    
    $
    8,831,000
    
    
    $
    225,000
    
    
    $
    
    
    
    $
    9,056,000
  Common Stock Warrants
  8




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June 30,
    
    December 31,2010
    
    2009Expected volatility
    
    
    86.8
    %
    
    
    88.0
    %Remaining contractual term (years)
    
    
    2.8
    
    
    
    3.3Risk-free interest rate
    
    
    1.0
    %
    
    
    1.9
    %Expected dividend yield
    
    
    0
    %
    
    
    0
    %Common stock price
    
    $
    2.15
    
    
    $
    1.60
 4) CONCENTRATIONS
  % of revenue
    
    % of revenuethree months ended
    
    six months ended
    
    % of accounts receivableJune 30,
    
    June 30,
    
    June 30,
    
    June 30,
    
    June 30,
    
    December 31,2010
    
    2009
    
    2010
    
    2009
    
    2010
    
    2009Customer A
    
    
    3
    %
    
    
    3
    %
    
    
    3
    %
    
    
    3
    %
    
    
    5
    %
    
    
    3
    %Customer B
    
    
    2
    %
    
    
    2
    %
    
    
    2
    %
    
    
    2
    %
    
    
    1
    %
    
    
    5
    %Customer C
    
    
    2
    %
    
    
    3
    %
    
    
    1
    %
    
    
    3
    %
    
    
    6
    %
    
    
    4
    %Other customers
    
    
    93
    %
    
    
    92
    %
    
    
    94
    %
    
    
    92
    %
    
    
    88
    %
    
    
    88
    %Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
  5) INVENTORY
  June 30,
    
    December 31,2010
    
    2009Finished goods
    
    $
    1,145,000
    
    
    $
    974,000BLU-U® evaluation units
    
    
    68,000
    
    
    
    58,000Work in process
    
    
    339,000
    
    
    
    398,000Raw materials
    
    
    712,000
    
    
    
    740,000Total
    
    $
    2,264,000
    
    
    $
    2,170,000
 ®
 6) OTHER ACCRUED EXPENSES
  June 30,
    
    December 31,2010
    
    2009Research and development costs
    
    $
    196,000
    
    
    $
    92,000Marketing and sales costs
    
    
    220,000
    
    
    
    418,000Reserve for sales returns and allowances
    
    
    150,000
    
    
    
    225,000Other product related costs
    
    
    726,000
    
    
    
    849,000Legal and other professional fees
    
    
    399,000
    
    
    
    334,000Due to former Sirius shareholders
    
    
    223,000
    
    
    
    214,000Employee benefits
    
    
    287,000
    
    
    
    271,000Other accrued expenses
    
    
    60,000
    
    
    
    54,000Total
    
    $
    2,261,000
    
    
    $
    2,457,000
 9




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##### Table of Contents



7) SHARE-BASED COMPENSATION
  Three months ended
    
    Six months endedJune 30, 2010
    
    June 30, 2009
    
    June 30, 2010
    
    June 30, 2009Cost of product revenues
    
    $
    12,000
    
    
    $
    14,000
    
    
    $
    27,000
    
    
    $
    34,000Research and development
    
    
    30,000
    
    
    
    31,000
    
    
    
    65,000
    
    
    
    81,000Marketing and sales
    
    
    19,000
    
    
    
    18,000
    
    
    
    46,000
    
    
    
    3,000General and administrative
    
    
    215,000
    
    
    
    163,000
    
    
    
    350,000
    
    
    
    307,000Share-based compensation expense
    
    $
    276,000
    
    
    $
    226,000
    
    
    $
    488,000
    
    
    $
    425,000
 Incentive and Non-qualified Stock Options
  Three months
    
    Six monthsended June 30, 2010Expected volatility
    
    
    75.35
    %
    
    
    75.43
    %Risk-free interest rate
    
    
    2.11
    %
    
    
    2.66
    %Expected dividend yield
    
    
    0
    %
    
    
    0
    %Expected life-directors and officers (years)
    
    
    6.03
    
    
    
    6.03Expected life-non-officer employees (years)
    
    
    5.77
    
    
    
    5.77
  AverageWeighted
    
    
    RemainingAverage
    
    
    Contractual
    
    
    AggregateExercise
    
    
    Term
    
    
    IntrinsicPrice
    
    
    (Years)
    
    
    ValueOutstanding, beginning of period, April 1, 2010
    
    
    3,142,300
    
    
    $
    4.94
    
    
    
    
    
    
    $Options granted
    
    
    71,000
    
    
    $
    2.15Options forfeited
    
    
    (3,500
    )
    
    $
    1.47Options expired
    
    
    (58,150
    )
    
    $
    20.55Options exercised
    
    
    (18,150
    )
    
    $
    1.19Outstanding, end of period
    
    
    3,133,500
    
    
    $
    4.61
    
    
    
    4.93
    
    
    $
    1,071,952Exercisable, end of period
    
    
    1,829,238
    
    
    $
    6.75
    
    
    
    4.17
    
    
    $
    285,070Options vested and expected to vest, end of period
    
    
    2,952,121
    
    
    $
    4.80
    
    
    
    4.85
    
    
    $
    959,918
 Unvested Shares of Common Stock
  2010
    
    2009Outstanding,
beginning of period, April 1, 2010
    
    
    620,000
    
    
    
    416,000Shares granted
    
    
    
    
    
    
    Shares vested
    
    
    (22,750
    )
    
    
    (22,750
    )Outstanding, end of period
    
    
    597,250
    
    
    
    393,250Weighted average grant date fair value of shares vested during period
    
    $
    2.20
    
    
    $
    2.20Weighted average grant date fair value of shares granted during period
    
    $
    
    
    
    $
    Weighted average grant date fair value of unvested shares, end of period
    
    $
    1.52
    
    
    $
    1.39Weighted average remaining years to vest
    
    
    3.14
    
    
    
    3.55
  10




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8) BASIC AND DILUTED NET INCOME (LOSS) PER SHARE
  Three months ended
    
    Six months endedJune 30, 2010
    
    June 30, 2009
    
    June 30, 2010
    
    June 30, 2009Weighted average common shares outstanding-basic
    
    
    24,187,569
    
    
    
    24,100,874
    
    
    
    24,155,194
    
    
    
    24,095,149Stock options and unvested shares of common stock
    
    
    378,907
    
    
    
    
    
    
    
    
    
    
    
    Weighted average common shares outstanding-diluted
    
    
    24,566,476
    
    
    
    24,100,874
    
    
    
    24,155,194
    
    
    
    24,095,149
  Three months ended
    
    Six months endedJune 30, 2010
    
    June 30, 2009
    
    June 30, 2010
    
    June 30, 2009Stock options
    
    
    2,930,000
    
    
    
    3,594,000
    
    
    
    3,134,000
    
    
    
    3,594,000Warrants
    
    
    1,395,000
    
    
    
    1,395,000
    
    
    
    1,395,000
    
    
    
    1,395,000Unvested shares of common stock
    
    
    422,000
    
    
    
    393,000
    
    
    
    597,000
    
    
    
    393,000Total
    
    
    4,747,000
    
    
    
    5,382,000
    
    
    
    5,126,000
    
    
    
    5,382,000
 9) SEGMENT REPORTING
  Three-month period ended
    
    Six-month period endedJune 30,
    
    June 30,
    
    June 30,
    
    June 30,2010
    
    2009
    
    2010
    
    2009REVENUESPDT drug and device product revenues
    
    $
    8,411,000
    
    
    $
    6,418,000
    
    
    $
    16,707,000
    
    
    $
    13,137,000Non-PDT product revenues
    
    
    290,000
    
    
    
    548,000
    
    
    
    708,000
    
    
    
    967,000Total revenues
    
    
    8,701,000
    
    
    
    6,966,000
    
    
    
    17,415,000
    
    
    
    14,104,000COSTS OF REVENUESPDT drug and device cost of product
revenues
    
    
    1,462,000
    
    
    
    1,286,000
    
    
    
    3,043,000
    
    
    
    3,001,000Non-PDT cost of product revenues
    
    
    320,000
    
    
    
    155,000
    
    
    
    557,000
    
    
    
    378,000Total costs of product revenues
    
    
    1,782,000
    
    
    
    1,441,000
    
    
    
    3,600,000
    
    
    
    3,379,000GROSS MARGINPDT drug and device product gross margin
    
    
    6,949,000
    
    
    
    5,132,000
    
    
    
    13,664,000
    
    
    
    10,136,000Non-PDT product gross margin
    
    
    (30,000
    )
    
    
    393,000
    
    
    
    151,000
    
    
    
    589,000Total gross margin
    
    $
    6,919,000
    
    
    $
    5,525,000
    
    
    $
    13,815,000
    
    
    $
    10,725,000
 11




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Three months ended
    
    Six months endedJune 30,
    
    June 30,
    
    June 30,
    
    June 30,2010
    
    2009
    
    2010
    
    2009United States
    
    
    95
    %
    
    
    95
    %
    
    
    96
    %
    
    
    95
    %Canada
    
    
    2
    %
    
    
    2
    %
    
    
    1
    %
    
    
    2
    %Korea
    
    
    1
    %
    
    
    2
    %
    
    
    1
    %
    
    
    2
    %Other
    
    
    2
    %
    
    
    1
    %
    
    
    2
    %
    
    
    1
    %Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
 10) COMPREHENSIVE LOSS
  Three months ended
    
    Six months endedJune 30,
    
    June 30,2010
    
    2009
    
    2010
    
    2009NET INCOME (LOSS)
    
    $
    188,000
    
    
    $
    (853,000
    )
    
    $
    (236,000
    )
    
    $
    (2,460,000
    )Change in net unrealized gains
on marketable securities
available-for-sale
    
    
    (41,000
    )
    
    
    (1,000
    )
    
    
    (75,000
    )
    
    
    (71,000
    )COMPREHENSIVE INCOME (LOSS)
    
    $
    147,000
    
    
    $
    (854,000
    )
    
    $
    (311,000
    )
    
    $
    (2,531,000
    )
 11) SIGNIFICANT PRODUCT AGREEMENTS
 Stiefel Agreement
 ® ® ®
  Daewoong Agreement
 ®
 12




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##### Table of Contents



® ®
 PhotoCure Agreement
 ® ® ®
  12) INCOME TAXES
  13) COMMITMENTS AND CONTINGENCIES
 Business Acquisition
   AdditionalCumulative Sales Milestone:
    
    Consideration:$35.0 million
    
    $1.0 million$45.0 million
    
    $1.0 millionTotal
    
    $2.0 million
 13




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##### Table of Contents



Third Amendment to Merger Agreement
    Lease Arrangements
  OperatingLeaseYears Ending December 31,
    
    Obligations2010
    
    $
    233,0002011
    
    
    480,0002012
    
    
    448,0002013
    
    
    Thereafter
    
    
    Total
    
    $
    1,161,000
 Legal Matters
 Rivers Edge Litigation Settlement
 ® ®
  14




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##### Table of Contents



Settlements, net  Winston Laboratories Arbitration Settlement
  
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 OVERVIEW
  ® ® ® ® ®
 ® ® ® ® ® ® ®
 ® ® ® ® ®
 ® ®
 ® ® ® ® ® ® ® ® ® ® ® ®
 ® ® ® ®
 CRITICAL ACCOUNTING POLICIES
  15




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RESULTS OF OPERATIONS  THREE AND SIX MONTHS ENDED JUNE 30, 2010 VERSUS JUNE 30, 2009
 REVENUES 
 Three months ended
    
    
    
    
    
    Six months endedJune 30,
    
    
    
    
    
    June 30,Increase/
    
    
    
    
    
    
    
    
    
    Increase/2010
    
    2009
    
    (Decrease)
    
    2010
    
    2009
    
    (Decrease)Levulan®
Kerastick®
product revenuesUnited States
    
    $
    7,568,000
    
    
    $
    5,621,000
    
    
    $
    1,947,000
    
    
    $
    15,117,000
    
    
    $
    11,306,000
    
    
    $
    3,811,000Canada
    
    
    169,000
    
    
    
    108,000
    
    
    
    61,000
    
    
    
    225,000
    
    
    
    243,000
    
    
    
    (18,000
    )Korea
    
    
    104,000
    
    
    
    126,000
    
    
    
    (22,000
    )
    
    
    213,000
    
    
    
    296,000
    
    
    
    (83,000
    )Other
    
    
    132,000
    
    
    
    84,000
    
    
    
    48,000
    
    
    
    219,000
    
    
    
    171,000
    
    
    
    48,000Subtotal Levulan®
Kerastick® product
revenues
    
    
    7,973,000
    
    
    
    5,939,000
    
    
    
    2,034,000
    
    
    
    15,774,000
    
    
    
    12,016,000
    
    
    
    3,758,000BLU-U® product revenuesUnited States
    
    
    438,000
    
    
    
    479,000
    
    
    
    (41,000
    )
    
    
    928,000
    
    
    
    1,121,000
    
    
    
    (193,000
    )Canada
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    
    
    
    
    
    5,000Subtotal BLU-U®
product revenues
    
    
    438,000
    
    
    
    479,000
    
    
    
    (41,000
    )
    
    
    933,000
    
    
    
    1,121,000
    
    
    
    (188,000
    )Total PDT product revenues
    
    
    8,411,000
    
    
    
    6,418,000
    
    
    
    1,993,000
    
    
    
    16,707,000
    
    
    
    13,137,000
    
    
    
    3,570,000Total Non-PDT product revenues
    
    
    290,000
    
    
    
    548,000
    
    
    
    (258,000
    )
    
    
    708,000
    
    
    
    967,000
    
    
    
    (259,000
    )Total product revenues
    
    $
    8,701,000
    
    
    $
    6,966,000
    
    
    $
    1,735,000
    
    
    $
    17,415,000
    
    
    $
    14,104,000
    
    
    $
    3,311,000
 ® ® ® ® ® ® ® ® ® ® ® ®
 ® ® ® ® ® ®
 ® ®
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® ® ® ® Legal Matters
 ® ® ® ®
 COST OF PRODUCT REVENUES
 Three months ended June 30,Increase/2010
    
    2009
    
    (Decrease)Levulan® Kerastick® cost of product revenues and royaltiesDirect Levulan® Kerastick® product costs
    
    $
    665,000
    
    
    $
    539,000
    
    
    $
    126,000Other Levulan® Kerastick® production costs including
internal costs assigned to support products, net
    
    
    17,000
    
    
    
    89,000
    
    
    
    (72,000
    )Royalty and supply fees (1)
    
    
    311,000
    
    
    
    235,000
    
    
    
    76,000Subtotal Levulan® Kerastick® cost of product revenues
and royalties
    
    $
    993,000
    
    
    $
    863,000
    
    
    $
    130,000BLU-U® cost of product revenuesDirect BLU-U® product costs
    
    $
    235,000
    
    
    $
    209,000
    
    
    $
    26,000Other BLU-U® product costs including internal costs assigned to support
products; as well as, costs incurred to ship, install and service the BLU-U® in
physicians offices
    
    
    234,000
    
    
    
    214,000
    
    
    
    20,000Subtotal BLU-U® cost of product revenues
    
    $
    469,000
    
    
    $
    423,000
    
    
    $
    46,000Total PDT cost of product revenues and royalties
    
    $
    1,462,000
    
    
    $
    1,286,000
    
    
    $
    176,000Non-PDT drug cost of product revenues and royalties
    
    $
    320,000
    
    
    $
    155,000
    
    
    $
    165,000Total cost of product revenues and royalties
    
    $
    1,782,000
    
    
    $
    1,441,000
    
    
    $
    341,000
 17




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##### Table of Contents



Six months ended June 30,Increase/2010
    
    
    2009
    
    
    (Decrease)Levulan® Kerastick® cost of product revenues and royaltiesDirect Levulan® Kerastick® product costs
    
    $
    1,330,000
    
    
    $
    1,103,000
    
    
    $
    227,000Other Levulan® Kerastick® production costs including
internal costs assigned to support products, net
    
    
    131,000
    
    
    
    448,000
    
    
    
    (317,000
    )Royalty and supply fees (1)
    
    
    617,000
    
    
    
    488,000
    
    
    
    129,000Subtotal Levulan® Kerastick® cost of product revenues
and royalties
    
    $
    2,078,000
    
    
    $
    2,039,000
    
    
    $
    39,000BLU-U® cost of product revenuesDirect BLU-U® product costs
    
    $
    512,000
    
    
    $
    500,000
    
    
    $
    12,000Other BLU-U® product costs including internal costs assigned to support
products; as well as, costs incurred to ship, install and service the BLU-U® in
physicians offices
    
    
    453,000
    
    
    
    462,000
    
    
    
    (9,000
    )Subtotal BLU-U® cost of product revenues
    
    $
    965,000
    
    
    $
    962,000
    
    
    $
    3,000Total PDT cost of product revenues and royalties
    
    $
    3,043,000
    
    
    $
    3,001,000
    
    
    $
    42,000Non-PDT drug cost of product revenues and royalties
    
    $
    557,000
    
    
    $
    378,000
    
    
    $
    179,000Total cost of product revenues and royalties
    
    $
    3,600,000
    
    
    $
    3,379,000
    
    
    $
    221,000
 
 1)
    
    Royalty and supply fees reflect amounts paid to our licensor, PARTEQ,
and amortization of an upfront fee and royalties paid to Draxis Health
Inc. on sales of Levulan®
Kerastick® in Canada MARGINS
 Three months ended June 30,Increase/2010
    
    
    
    
    
    2009
    
    
    
    
    
    (Decrease)Levulan® Kerastick® gross margin
    
    $
    6,980,000
    
    
    
    88
    %
    
    $
    5,076,000
    
    
    
    85
    %
    
    $
    1,904,000BLU-U® gross margin
    
    
    (31,000
    )
    
    
    (7
    %)
    
    
    56,000
    
    
    
    12
    %
    
    
    (87,000
    )Total PDT drug & device gross margin
    
    $
    6,949,000
    
    
    
    83
    %
    
    $
    5,132,000
    
    
    
    80
    %
    
    $
    1,817,000Total Non-PDT drug gross margin
    
    
    (30,000
    )
    
    
    (10
    %)
    
    
    393,000
    
    
    
    72
    %
    
    $
    (423,000
    )TOTAL GROSS MARGIN
    
    $
    6,919,000
    
    
    
    80
    %
    
    $
    5,525,000
    
    
    
    79
    %
    
    $
    1,394,000
 Six months ended June 30,Increase/2010
    
    
    
    
    
    
    2009
    
    
    
    
    
    
    (Decrease)Levulan® Kerastick® gross margin
    
    $
    13,696,000
    
    
    
    87
    %
    
    $
    9,977,000
    
    
    
    83
    %
    
    $
    3,719,000BLU-U® gross margin
    
    
    (32,000
    )
    
    
    (3
    %)
    
    
    159,000
    
    
    
    14
    %
    
    
    (191,000
    )Total PDT drug & device gross margin
    
    $
    13,664,000
    
    
    
    82
    %
    
    $
    10,136,000
    
    
    
    77
    %
    
    $
    3,528,000Total Non-PDT drug gross margin
    
    
    151,000
    
    
    
    21
    %
    
    
    589,000
    
    
    
    61
    %
    
    $
    (438,000
    )TOTAL GROSS MARGIN
    
    $
    13,815,000
    
    
    
    79
    %
    
    $
    10,725,000
    
    
    
    76
    %
    
    $
    3,090,000
 ® ® ®
 18




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® ® ®
 ®
 RESEARCH AND DEVELOPMENT COSTS
 MARKETING AND SALES COSTS
 GENERAL AND ADMINISTRATIVE COSTS
 SETTLEMENTS, NET
 OTHER INCOME, NET
 (LOSS) GAIN ON CHANGE IN FAIR VALUE OF WARRANTS
 NET INCOME (LOSS)
 19




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LIQUIDITY AND CAPITAL RESOURCES
   ® ® ® ®
   AdditionalCumulative Sales Milestone:
    
    Consideration:$35.0 million
    
    $1.0 million$45.0 million
    
    $1.0 millionTotal
    
    $2.0 million
 20




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##### Table of Contents



Contractual Obligations and Other Commercial Commitments
 L. Perrigo Company
 ®
 Merger With Sirius Laboratories, Inc.
 ® ®
 Third Amendment To The Merger Agreement
   PARTEQ Agreement
 ®
 21




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##### Table of Contents



National Biological Corporation Amended And Restated Purchase And Supply Agreement
 ®
 Sochinaz SA
 ®
 Lease Agreements
  Research Agreements
   Total
    
    1 Yr or less
    
    2-3 Years
    
    4-5 Years
    
    After 5Operating lease obligations
    
    $
    1,161,000
    
    
    $
    472,000
    
    
    $
    689,000
    
    
    $
    
    
    
    $
    Purchase obligations (1, 2)
    
    
    2,655,000
    
    
    
    2,393,000
    
    
    
    262,000
    
    
    
    
    
    
    
    Minimum royalty obligations (3)
    
    
    431,000
    
    
    
    219,000
    
    
    
    188,000
    
    
    
    24,000
    
    
    
    Total obligations
    
    $
    4,247,000
    
    
    $
    3,084,000
    
    
    $
    1,139,000
    
    
    $
    24,000
    
    
    $
    
 
 1)
    
    Research and development projects include various commitments including obligations for our
study on the treatment of actinic keratoses and reduction of non-melanoma skin cancers in
immunosuppressed solid organ transplant recipients, or SOTR, who have demonstrated that they
are at risk of developing multiple squamous cell carcinomas.2)
    
    In addition to the obligations disclosed above, we have contracted with Therapeutics, Inc.,
a clinical research organization, to manage the clinical development of our products in the
field of dermatology. This organization has the opportunity for additional stock grants,
bonuses, and other incentives for each product indication ranging from $250,000 to
$1,250,000, depending on the regulatory phase of development of products under Therapeutics
management.3)
    
    Minimum royalty obligations relate to our agreements with PARTEQ and Perrigo described above.  INFLATION
  22




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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Interest Rates
   Derivative Financial Instruments
  Currency Exchange Rates
    
 ITEM 4. CONTROLS AND PROCEDURES
   Forward-Looking Statements Safe Harbor
 ® ® ® ®
 23




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Ò
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PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS.
  
 ITEM 1A. RISK FACTORS
   Risks Related To DUSA
 We May Not Be Profitable On An Annual Basis And May Not Be Profitable In The Future Unless We Can
Successfully Market And Sell Significantly Higher Quantities Of Our Products.
 If We Do Not Become Profitable, We May Need More Capital
  If A Competitive Product Is Successful Our Revenues Could Decline, and Our Ability To Become
Profitable Could Be Delayed
 ® ® ® ® ® ®
 Any Failure To Comply With Ongoing Governmental Regulations In The United States And Elsewhere Will
Limit Our Ability To Market Our Products And Become Profitable.
  
    
    approval of manufacturing facilities, including adherence to good manufacturing and
laboratory practices during production and storage,
    
    controlled research and testing of some of these products even after approval,
    
    control of marketing activities, including advertising and labeling, and
    
    state permits for the sale and distribution of products manufactured in and out-of-state.
  25




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##### Table of Contents




    
    send warning letters,
    
    impose fines and other civil penalties on us,
    
    seize our products,
    
    suspend our regulatory approvals,
    
    cease the manufacture of our products,
    
    refuse to approve pending applications or supplements to approved applications filed by us,
    
    refuse to permit exports of our products from the United States,
    
    require us to recall products,
    
    require us to notify physicians of labeling changes and/or product related problems,
    
    impose restrictions on our operations, and/or
    
    criminally prosecute us.
  ® ® ®
 ® ®
 If Product Sales Do Not Continue to Increase, We May Not Be Able To Advance Development Of Our
Other Potential Products As Quickly As We Would Like To, Which Would Delay The Approval Process And
Marketing Of New Potential Products, If Approved.
  The Current Global Credit And Financial Market Conditions May Affect Our Business.
  26




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##### Table of Contents



® ®
 If The Economic Slowdown Adversely Affects Our Customers Ability To Meet Our Payment Terms, Our
Cash Flow Would Be Adversely Affected And Our Ability To Achieve Profitability On An Annual Basis
Could Be Delayed.
  We Have Had Significant Losses And May Have Losses In The Future.
  Our Ability To Use Net Operating Loss Carryforwards and Tax Credit Carryforwards To Offset Future
Taxable Income May Be Further Limited As A Result Of Past Or Future Transactions Involving Our
Common Stock.
  If We Are Unable To Obtain The Necessary Capital To Fund Our Operations, We Will Have To Delay Our
Development Program And May Not Be Able To Complete Our Clinical Trials.
   We Have Limited Patent Protection, And If We Are Unable To Protect Our Proprietary Rights,
Competitors Might Be Able To Develop Similar Products To Compete With Our Products And Technology.
 ®
 
    
    methods of using ALA and its unique physical forms in combination with light to treat conditions such as AKs
and acne,
    
    compositions and apparatus for those methods, and
    
    unique physical forms of ALA.
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® ®
   ®
 ® ® ® exparte
 ® ® ®
  
    
    these persons or entities might breach the agreements,
    
    we might not have adequate remedies for a breach, and/or,
    
    our competitors will independently develop or otherwise discover our trade secrets.
 Litigation Is Expensive And We May Not Be Able To Afford The Costs.
  28




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Since We Now Operate The Only FDA Approved Manufacturing Facility For The Kerastick ® And
Continue To Rely Heavily On Sole Suppliers For The Manufacture Of Levulan ® The
BLU-U ® ClindaReach ® , And Meted ® Any Supply Or Manufacturing
Problems Could Negatively Impact Our Sales
 ® ® ® ® ® ®
  
    
    product yields,
    
    quality control,
    
    component and service availability,
    
    compliance with FDA regulations, and
    
    the need for further FDA approval if manufacturers make material changes to manufacturing processes
and/or facilities.
  We Have Only Limited Experience Marketing And Selling Pharmaceutical Products Outside of the United
States And As A Result, Our Revenues From Product Sales May Suffer.
 ® ® ® ®
  The Commercial Success Of Any Product That We May Develop Will Depend Upon The Degree Of Market
Acceptance Of Our Products Among Physicians, Patients, Health Care Payors, Private Health Insurers
And The Medical Community.
  
    
    the effectiveness, or perceived effectiveness, of our product in comparison to competing products,
    
    the existence of any significant side effects, as well as their severity in comparison to any competing products,
    
    potential advantages over alternative treatments,
    
    the ability to offer our product for sale at competitive prices,
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##### Table of Contents




    
    relative convenience and ease of administration,
    
    the strength of marketing and distribution support, and
    
    sufficient third-party coverage or reimbursement.
 If We Cannot Improve Physician Reimbursement And/Or Convince More Private Insurance Carriers To
Adequately Reimburse Physicians For Our Product, Sales May Suffer.
 ® ®
  We Have Only Three Therapies That Have Received Regulatory Approval Or Clearance, And We Cannot
Predict Whether We Will Ever Develop Or Commercialize Any Other Levulan ® Products.
 Our Potential Products Are In Early Stages Of Development And May Never Result In Any Additional
Commercially Successful Products.
 ® ® ®
 
    
    delays in product development, clinical testing or manufacturing,
    
    unplanned expenditures in product development, clinical testing or manufacturing,
    
    failure in clinical trials or failure to receive regulatory approvals,
    
    emergence of superior or equivalent products,
    
    inability to market products due to third-party proprietary rights, and
    
    failure to achieve market acceptance.
 ®
 We Must Receive Separate Approval For Any Drug or Medical Device Products Before We Can Sell Them
Commercially In The United States Or Abroad.
 ® ® ®
 ® ®
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Because Of The Nature Of Our Business, The Loss Of Key Members Of Our Management Team Could Delay
Achievement Of Our Goals.
  Collaborations With Outside Scientists May Be Subject To Restriction And Change.
  Risks Related To Our Industry
 Product Liability And Other Claims Against Us May Reduce Demand For Our Products Or Result In
Damages.
 We Are Subject To Risk From Potential Product Liability Lawsuits Which Could Negatively Affect Our
Business.
  Our Business Involves Environmental Risks And We May Incur Significant Costs Complying With
Environmental Laws And Regulations.
  We May Not Be Able To Compete Against Traditional Treatment Methods Or Keep Up With Rapid Changes
In The Biotechnology And Pharmaceutical Industries That Could Make Some Or All Of Our Products
Non-Competitive Or Obsolete.
 Competing Products And Technologies Based On Traditional Treatment Methods May Make Our Products Or
Potential Products Noncompetitive Or Obsolete.
    
    
    price reductions,
    
    lower levels of third-party reimbursements,
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
    
    failure to achieve market acceptance, and
    
    loss of market share,
   ® ® ® ® ® ® ®
 Our Competitors In The Biotechnology And Pharmaceutical Industries May Have Better Products,
Manufacturing Capabilities Or Marketing Expertise.
 ®
  
    
    the ease of administration of our method of PDT,
    
    the degree of generalized skin sensitivity to light,
    
    the number of required doses,
    
    the selectivity of our drug for the target lesion or tissue of interest, and
    
    the type and cost of our light systems.
  Risks Related To Our Stock
 Our Common Stock May Not Continue To Trade On The Nasdaq Global Market, Which Could Reduce The
Value Of Your Investment And Make Your Shares More Difficult To Sell.
  Our Stock Price Is Highly Volatile And Sudden Changes In The Market Value Of Our Stock Occur Making
An Investment Risky.
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Significant Fluctuations In Orders For Our Products, On A Monthly And Quarterly Basis, Are Common
Based On External Factors And Sales Promotion Activities. These Fluctuations Could Increase The
Volatility Of Our Stock Price.
  Future Sales Of Securities May Cause Our Stock Price To Decline.
  Effecting A Change Of Control Of DUSA Would Be Difficult, Which May Discourage Offers For Shares Of
Our Common Stock.
     
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
  
 ITEM 4. REMOVED AND RESERVED
 
 ITEM 5. OTHER INFORMATION
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ITEM 6. EXHIBITS
 EXHIBITNO.
    
    DESCRIPTION OF EXHIBIT3(a.1)
    
    Certificate of Incorporation, as amended, filed as Exhibit 3(a) to the Registrants Form
10-K for the fiscal year ended December 31, 1998, and is incorporated herein by
reference.3(a.2)
    
    Certificate of Amendment to the Certificate of Incorporation, as amended, dated October
28, 2002 and filed as Exhibit 99.3 to the Registrants Quarterly Report on Form 10-Q for
the fiscal quarter ended September 30, 2002, filed November 12, 2002, and is incorporated
herein by reference3(b)
    
    By-laws of the Registrant, filed as Exhibit 3.1 to the Registrants current report on
Form 8-K, filed on November 2, 2008, and is incorporated herein by reference.31(a)
    
    Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.31(b)
    
    Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.32(a)
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.32(b)
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.99.1
    
    Press Release dated August 3, 2010
 
 SIGNATURES
  DUSA Pharmaceuticals, Inc.By:
    
    /s/ Robert F. Doman

Robert F. DomanPresident and Chief Executive Officer(principal executive officer)
  By:
    
    /s/ Richard C. Christopher

Richard C. ChristopherVice President, Finance and Chief FinancialOfficer (principal financial officer)
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EXHIBIT INDEX
 3(a.1)
    
    Certificate of Incorporation, as amended, filed as Exhibit 3(a) to the Registrants Form 10-K for the fiscal year
ended December 31, 1998, and is incorporated herein by reference.3(a.2)
    
    Certificate of Amendment to the Certificate of Incorporation, as amended, dated October 28, 2002 and filed as Exhibit
99.3 to the Registrants Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2002, filed November
12, 2002, and is incorporated herein by reference.3(b)
    
    By-laws of the Registrant, filed as Exhibit 3.1 to the Registrants current report on Form 8-K, filed on November 2,
2008, and is incorporated herein by reference.31(a)
    
    Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.31(b)
    
    Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.32(a)
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32(b)
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.99.1
    
    Press Release dated August 3, 2010.
 35